BBQ Company, a multi-billion-dollar company, is the world’s leading supplier of Banana-based products namely Banana Chips, Banana Milk, Banana Powder and their best seller, the Banana Cue. Data with respect to these products are as follows: Banana Chips Banana Milk Banana Powder Banana Cue Direct Materials 40 per unit 50 per unit 35 per unit 5 per unit Direct Labor 15 per unit 20 per unit 10 per unit 2 per unit Variable Overhead 5 per unit 10 per unit 5 per unit 1 per unit Fixed Overhead 2 per unit 4 per unit 2 per unit 0.4 per unit Variable selling and Admin Expenses 2 per unit
BBQ Company, a multi-billion-dollar company, is the world’s leading supplier of Banana-based products namely Banana Chips, Banana Milk, Banana Powder and their best seller, the Banana Cue. Data with respect to these products are as follows:
|
|
Banana Chips |
Banana Milk |
Banana Powder |
Banana Cue |
|
Direct Materials |
40 per unit |
50 per unit |
35 per unit |
5 per unit |
|
Direct Labor |
15 per unit |
20 per unit |
10 per unit |
2 per unit |
|
Variable |
5 per unit |
10 per unit |
5 per unit |
1 per unit |
|
Fixed Overhead |
2 per unit |
4 per unit |
2 per unit |
0.4 per unit |
|
Variable selling and Admin Expenses |
2 per unit |
3 per unit |
2 per unit |
0.2 per unit |
|
Fixed Selling and Admin Expenses |
0.5 per unit |
0.75 per unit |
0.5 per unit |
0.05 per unit |
|
Selling Price |
100 per unit |
120 per unit |
80 per unit |
20 per unit |
True to its vision and mission to support the country where it was established, BBQ only acquires their raw materials (Banana) from local farmers in their country.
In 2020, there was an outbreak of a virus which affected Banana plantations across the country even abroad. This virus prevents the Banana from producing Banana Blossom which would eventually lead to the death of the Banana. Because of this virus, the supply of Bananas needed by BBQ for the production of their products declined massively. According to the purchasing manager, BBQ could only get a hold of 100,000 kilos of Bananas. Despite the decrease in supply, the prices of banana in the market remained at50 per kilo.
The outbreak of the Banana Virus caused a Banana Craze in the public. This is a phenomenon wherein an affected individual would have an extreme desire to eat a lot of Banana. This event caused a surge in the demand for their product. The
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